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The third way or the highway

Posted in Media, Digital December 11th, 2006 by Stuart Aitken

“It’s good to talk” said Bob Hoskins for most of the 1990s, encouraging the great British public to spend more time chatting on BT’s time. With the launch of BT Vision this week are we soon to see Hoskins telling us that it’s also good to watch football, classic TV programmes, Disney films and – some time down the line – to gamble too?

BT Vision is an innovative package, described by Gavin Patterson, managing director of consumer at BT, as a “third way” between existing services such as Sky and Freeview. The service offers customers a combination of a Freeview set top box that delivers over 30 free to air channels and an inbuilt personal video recorder (PVR) that can store up to 80 hours of TV. This part of the offering comes free with a monthly subscription to BT Total Broadband. Also on offer will be video-on-demand, charged on a pay-per-view or pay-per-download basis.

Crucial to BT’s offering are 25 content deals signed with a number of key players, among them DreamWorks, Disney, BBC Worldwide, Endemol and MTV. In its alliances BT has shown itself to be wise to the demands of the pay-TV audience. Nowhere is this more apparent than in its deal with Setanta Sports which will guarantee 46 Premiership football matches to be shown next season.

While this agreement with the young buck broadcaster that is wrestling control of football from the iron clutches of Sky is very good business indeed, there is of course a flaw. The deal begins next season. In the meantime BT Vision will only be able to offer a “catch-up” or “replay” television service which will allow users to watch key football matches “near live”. Exactly how many people will be excited by this prospect remains to be seen.

This reveals a key flaw in BT’s roll out. Despite all the press fanfare at launch, we are forced to wonder just how ready BT Vision is. After all, this is a measured roll-out set to “pick up momentum in the spring”. In the meantime, where is the advertising campaign? Nothing says “we’re not ready” more than the absence of an accompanying marketing push.

As a result, BT has missed the chance to make a big impact in the run up to Christmas. The key fact being pushed by BT is that they offer a cheaper alternative, but what is the reward for customers quick to sign up? For the foreseeable future installation of the V-box will cost £60 with a further £30 connection charge. “BT will introduce a self-install version of BT Vision next year”. Why not now?

All of these factors may impact significantly on BT’s goal of “two to three million BT Vision customers in the medium term”. Even if this forecast is somewhat woolly, many already believe it to be extremely optimistic. It is hard to escape the notion that BT Vision looks distinctly like a broadband service with a limited TV offering bolted on. As a result it smells of being a retention product rather than a fully fledged competitor to the likes of Sky and NTL: Telewest. This is a very competitive market. With Tiscali and Homechoice set to enter the fray it is not one that is set to get any easier for BT.

Whatsmore, with a number of packages already out there, BT will have to be very clever how it markets its product. Freeview is not a difficult proposition to market because it’s easy to understand and involves a simple one-off payment. BT Vision is more complex. Hopefully the new product doesn’t simply get bundled into the current strain of BT advertising. If it does, expect to see the current campaign’s dreary family fighting for the controller as they struggle to come to terms with such increased choice.